Eukaryotic mRNAs contain a 5'-terminal cap, m.sup.7 GpppN (1). This important modification of RNA polymerase II (pol II) transcripts occurs soon after they attain a chain length of 25-30 nucleotides (2-4). At this stage in transcription the C-terminal domain (CTD) of the pol II largest subunit is hyperphosphorylated (5, 6), and capping enzyme (CE) then binds to it (7-9). In mammals, CE is a bifunctional protein consisting of N-terminal RNA 5'-triphosphatase and C-terminal guanylyltransferase domains (7, 10). The combined effect of these activities on nascent pre-mRNAs is the conversion of 5'-terminal pppN to GpppN. Subsequent N7-methylation of GpppN 5' ends to form m.sup.7 GpppN caps is catalyzed by RNA (guanine-7-) methyltransferase (1, 11, 12). The 7-methylguanosine (m.sup.7 G) moiety of the cap is a key feature in several aspects of RNA metabolism including transcript stability (13, 14), processing (15-17), transport to the cytoplasm (18, 19) and initiation of translation (1, 20).
Several functions of the cap structure are mediated by a family of cap-binding protein complexes that specifically recognize m.sup.7 GpppN (19, 21). For example, in the nucleus, a cap-binding protein complex facilitates pre-mRNA splicing accuracy and efficiency and possibly nuclear export (19). In the cytoplasm, the heterotrimeric initiation factor eIF4F, which includes the cap-binding subunit eIF4E, promotes ribosome binding and translation initiation (21, 22). Although capping stabilizes mRNAs (13, 14), cap m.sup.7 G is also recognized by the yeast decapping enzyme (23), and loss of the blocked 5' end leads to 5'.fwdarw.3' exonucleolytic degradation (13, 24). Consistent with the multiple effects of cap on gene expression, the RNA (guanine-7-) methyltransferase, like the RNA 5'-triphosphatase (25) and guanylyltransferase (26), is essential for viability in yeast (27).